Correlation Between Information Services and Exponent
Can any of the company-specific risk be diversified away by investing in both Information Services and Exponent at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Information Services and Exponent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Services Group and Exponent, you can compare the effects of market volatilities on Information Services and Exponent and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Information Services with a short position of Exponent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and Exponent.
Diversification Opportunities for Information Services and Exponent
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Information and Exponent is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Information Services Group and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent and Information Services is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Information Services Group are associated (or correlated) with Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of Information Services i.e., Information Services and Exponent go up and down completely randomly.
Pair Corralation between Information Services and Exponent
Considering the 90-day investment horizon Information Services Group is expected to under-perform the Exponent. In addition to that, Information Services is 1.33 times more volatile than Exponent. It trades about -0.02 of its total potential returns per unit of risk. Exponent is currently generating about -0.01 per unit of volatility. If you would invest 10,309 in Exponent on December 30, 2023 and sell it today you would lose (2,040) from holding Exponent or give up 19.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Information Services Group vs. Exponent
Performance |
Timeline |
Information Services |
Exponent |
Information Services and Exponent Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Information Services and Exponent
The main advantage of trading using opposite Information Services and Exponent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services position performs unexpectedly, Exponent can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Exponent will offset losses from the drop in Exponent's long position.Information Services vs. Broadridge Financial Solutions | Information Services vs. Fiserv Inc | Information Services vs. Gartner | Information Services vs. Kyndryl Holdings |
Exponent vs. Jacobs Solutions | Exponent vs. Dycom Industries | Exponent vs. Innovate Corp | Exponent vs. Matrix Service Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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